Capstone prides itself on its ability to identify unique investment ideas through expansive, deep-dive policy analysis. Capstone’s analysts sift through murky comment letters, proposed rules, agency publications, and hefty legislative drafts. We also attend public hearings; participate in conference calls; visit municipal bonding issuers from Puerto Rico to the US Virgin Islands and Illinois; and attend opaque court hearings and niche oversight board hearings in search of insight, unique investment ideas and compelling conclusions often missed by others. Capstone also regularly meets with policymakers, insiders, stakeholders and some of the best and brightest thinkers at the municipal, state and federal levels throughout our research process. The output of this process results in differentiated investment ideas with unique distressed or event-driven features.
Capstone analysts pay special attention to distressed credit and event-driven situations during the idea generation process. What makes us different is our focus on finding and exploring non-traditional ideas and our willingness to engage in in-depth analysis and get deep “in the weeds” on government policy.
Our philosophy is based on the idea that good investment themes come from being masters of the policy details. Through our ongoing coverage of non-traditional ideas, we have built strong connections with current and former senior officials across the contiguous United States and its territories, leading financial advisory firms, as well as economists and vital members of the business community. Many of these relationships have been fostered for years, and our continued dialogue with these individuals has allowed us to more closely track volatile situations such as Puerto Rico’s fiscal and economic crisis as it has evolved.
Below, we highlight examples of select key ideas and situations that are included within our expertise.
Distressed Credit:
• Distressed Municipal Debt: Puerto Rico, Detroit, Illinois
• TXU/Energy Future Holdings Restructuring
• Federal Energy Regulatory Commission (FERC) Pipeline Decisions
• Westinghouse
• Coal Mining Companies
• Pension Related Issues
• Gaming
Event-Driven Ideas:
• Tax Inversions and Tax Reform
• Real Estate Investment Trust (REIT) Conversions
• Master Limited Partnership (MLP) Conversions/Dropdowns
• Merger Arbitrage
Regulatory Ideas:
• FCC Merger Reviews
• Federal Trade Commission (FTC)/Department of Justice (DOJ) Anti-Trust Related Matters
• Trucking and Transportation
• Product Liability Claims
• Net Metering Policies
• For-Profit Education